Oil prices simmer as US crude inventories fall, geopolitical crises deepen

Crude oil prices surge on supply concerns

Oil prices surged on April 3 helped by a host of factors such as a larger-than-anticipated drop in the US inventories and escalating geopolitical tension prompting concerns about tighter supplies.

Brent futures for June delivery saw a 0.22 percent rise to $89.12 per barrel, while the US West Texas Intermediate (WTI) crude futures for May climbed 0.2 percent to $85.32 a barrel. Brent Crude and WTI Crude Oil had climbed to their highest since October on April 2.

Last week, US inventories declined by 2.3 million barrels, surpassing analysts' forecasts of a 1.5-million-barrel drop in a Reuters poll. The US government data is due to be released later today.

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Geopolitical tensions added to market anxieties as well. A Ukrainian drone targeted a major Russian refinery. Russia, one of the world's top oil producers and exporters, has faced attacks on its oil refineries by Ukraine while also launching assaults on Ukraine's energy infrastructure.

Iran has also said that it would retaliate against Israel for an airstrike that killed two of its generals and five military advisors at its embassy compound in Damascus. This has heightened concerns about further escalation in the Middle-East conflict.

Mexico's state energy company Pemex cancelled crude exports of up to 436,000 barrels per day this month to accommodate the processing of domestic oil at the new Dos Bocas refinery, according to a Reuters report.

Despite these developments, an OPEC+ (Organization of the Petroleum Exporting Countries) ministerial panel meeting, due today, is unlikely to recommend any changes to oil output policies, sources told Reuters.